Wed, Mar 22, 2006 page12

• New fund to promote local brands

  FRESH IMAGE The new venture aims to help local firms wanting fo establish internationally recognized products to promote a made-in-Taiwan image

  • By Jessie Ho / STAFF REPORTER
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  To help companies develop international-class brands and promote the domestic "Branding Taiwan" project, the iD SoftCapital Group (智融集團) and the government unveiled the nation's first venture-capital fund to invest in brands.

  "As the margins generated by manufacturing have been declining, Taiwan's companies should allocate more resources to brand marketing to create more added value," Stan Shih (施振榮), chairman of iD SoftCapital and founder of Acer Inc, told a press conference yesterday.

  "The knowledge-based economy is brand-based economy," he said.

  The government will hold a 49 percent stake in the NT$2 billion (US$61.7 million) fund, with the quasi-official Taiwan External Trade Development Council (TAITRA, 外貿協會) taking 15 percent, the Ministry of Economic Affairs 4 percent and the Development Fund 3 percent.

  iD SoftCapital, the fund's operator, will invest NT$200 million and look for other private companies to complete the fund by the end of second quarter.

  The investment targets are local companies which are making an effort to establish international brands and promote a made-in-Taiwan image, regardless where the firms are based, Shih said.

  He said the fund plans to invest in companies involved in digital technology, agri-business and culture-related industries.

  Shih plans to complete the deployment of the venture capital within five years with a return of 30 percent.

  The venture capital will help the Ministry of Economic Affairs' with its "Branding Taiwan" project, which aims to develop two Taiwanese brands that can crack the world's top 100 list, and five brands with value exceeding US$1 billion by 2012, Vice Minister of Economic Affairs Steve Chen (陳瑞隆) said at the conference.

  However, the aim of making Taiwanese brands world renowned is a road full of challenges, said Steve Chang (張明正), chairman of Trend Micro Inc (趨勢科技), at a media gathering yesterday.

  The anti-virus software maker has been the nation's top brand for the past three years, with brand valued at more than US$1.077 billion last year.

  The first step to branding is quality products or services that cater to market demand, Chang said, citing Google and Skype as examples.

  "Taiwanese companies should try to think and do differently, instead of looking for the so-called `correct answers,'" he said.

  Creating a successful brand, however, takes huge investment and resources, as well as patience, Vithala Rao, a professor of marketing and quantitative methods at Cornell University, said at the gathering in Taipei.

  Rao was invited by Trend Micro to deliver a speech on branding strategies at National Taiwan University yesterday.

  Rao suggested Taiwanese firms buy or merge with major international brands to save costs. After acquiring the brand, the company still needs to maintain and keep marketing the brand to stay competitive, he said.

  When looking for the right brand to acquire, cultural similarities and

  complementarity are key, he said.

  BenQ Corp's (明基) acquisition of Simens' handset division, is an example of

  the right way to go, Chang said, but BenQ will have to overcome the

  difficulty of integrating companies from different cultures before taking

  the advantage of the brand.
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